Syed SAAD-UD-DIN SHAH VS DEPUTY COLLECTOR, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-KARACHI 974 (2013)

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 156(1) (8) (9) (89), (90), 168, 171, 180 & 211---Seizure of vehicle on charge of being smuggled---Vehicle registered with "Motor Registration Authority"---Registration Book of vehicle produced by appellant not found fake by Registration department---Non-production of import documents of vehicle by appellant---Effect---Customs authorities had no authority to detain such vehicle merely on suspicion---Appellant had showed documents of registration in his name to the Customs officials who having detained the car, insisted the production of import documents for release of the vehicle---Detention of vehicle was an act of high-handedness, which was committed through misuse of official authority ---Adjudication officer had ignored that the Registration of Vehicle was sufficient proof of fact that the vehicle was legally imported in the country because as soon as the registration papers were presented before Motor Registration Authority, it was their responsibility to check the documents and examine them thoroughly with reference to their genuineness before registration---Calling upon the party to produce the bill of entry or any other legal import documents of vehicle after lapse of nineteen years was nothing but a practical joke---Importer and exporter was liable to maintain importation related record and documents only for a period of five years and individual importer who had imported the goods for private or personal use was exempted from such condition---Appellant had produced the registration documents, the burden of proof shifted on the Customs authorities who had failed to discharge the same---Impugned orders were set aside---Appeal was allowed.

2008 PTD 525; 2004 PCr.LJ 1958 and 2007 SCMR 10 rel.

Muhammad Afzal Awan for Appellant.

Zubair Awan for Respondents.

Date of hearing: 24th July, 2013.

JUDGMENT

GULAB SHAH AFRIDI, MEMBER (JUDICIAL).---This order will dispose of instant appeal filed by Syed Saad-ud-Din Shah, against the Order-in-Appeal No.7052/2013 dated 14-2-2013 passed by the Collector of Customs (Appeals) Karachi against the Order-in-Original No. 23/2012 dated 18-10-2012 passed by Deputy Collector, (HQ), Customs House, Gaddani.

2.Brief facts of the case as reported are that the staff of Model Customs Collectorate of Gawadar, during routine checking of road traffic on R.C.D Highway near Khurkhera, a Toyota Corolla Saloon Car bearing Reg:No.AAH397, Chassis No.EE1O1-3054936, Engine No.4E-FE-0677466, Model-1993 (as per seat belt) was signalled to stop. The driver/owner of the car was asked to produce legal import/ registration documents. He produced photocopy of Registration Book No. NC0081779. However, he failed to produce any other relevant document. The Customs staff detained the vehicle in terms of section 17 of the Customs Act, 1969 and the driver/owner of the vehicle was given a chance for two days to submit documents regarding auction of vehicle, but he did not turn up. Therefore, the Customs Staff converted the detention memo. into seizure and seized the same for violation of the relevant provisions of law.

3.The Adjudicating Officer vide the impugned order held that the charges contained in the show-cause notice dated 15-8-2012 had been established. The operative part of the same is reproduced as under:--

"I have gone through the whole case record. Foreign assembled vehicles are mainly available in the country either through legal import or through auction of confiscated vehicles by the law enforcement agencies (LEAs) including Pakistan Customs. In both these cases, there are complete trail of documents. In case of legally imported vehicles, there are Bill of lading (B/L), Goods Declaration (GD) and proof of payment of duty and taxes etc., while in case of auctioned vehicles, there are proof of purchase in auction along with certificate issued by the concerned department/agency on the basis of which the vehicle is registered by the Excise and Taxation department/MRA. In this case despite best efforts by the customs authorities neither the documents were provided by the concerned MRA/Excise department or any, legally valid proof was provided by the claimant of the vehicle to prove beyond any shadow of doubt the lawful auction or registration of the vehicle. Since no one appeared before this adjudicating officer to defend the case along-with lawful import/auction documents of the seized vehicle, thus it is proved beyond any shadow of doubt that the owner of the vehicle has nothing to defend the point that the seized vehicle is legally auctioned one. In C.P. No.77/2010, the Honorable Supreme Court of Pakistan has directed that F.I.Rs. should be lodged against the owner/claimant of smuggled vehicles, but in this case it seems that the claimant of the vehicle was not aware that the vehicle is smuggled one, as he has provided documents related with the purchase of the seized vehicle from its previous owner. (sic) to mention here that from perusal of the registration documents it has been observed that the vehicle has been transferred in the name of new owner Muhammad Hassan son of Khair Muhammad and new registration book was issued on 26-12-2009 and without original file of the vehicle the transfer process is not possible, but after transferring the vehicle the file is misplaced after 26-12-2009 (approximately two and half years), this aspect is beyond comprehension that why only a page of register is available but the auction documents on the basis of which the vehicle was registered by the Excise department are un-traceable. Therefore, in the absence of any legal auction documents registration of the vehicle becomes illegal. In the light of foregoing, the charges levelled in the show-cause notice stand established, I therefore, order for outright confiscation of the seized vehicle under clauses 8, 9, 89 and 90 of section 156(1) of the Customs Act, 1969 in favour of the State. The illegal registration of the vehicle needs a separate inquiry which is beyond the jurisdiction/case before this adjudicating officer, the Director General, Excise and Taxation, MRA, Quetta may like to take necessary action in the matter."

4.Dissatisfied with the Order-in-Original No.23/2012 dated 10-10-2012, the appellant filed an appeal before the Collector (Appeals), Karachi, who vide Order-in-Appeal rejected the appeal.

5Being aggrieved and dissatisfied with the impugned orders the appellant filed the instant appeal before this Tribunal on the grounds incorporated in the Memo. of Appeal.

6.Learned Counsel for the appellant filed the Additional submissions on 25-7-2013, which are reproduced as under:--

(1)That the appellant purchased vehicle No. AAH.397, Engine No.4E-FE-0677466, Chassis No. EE101-3054936, with the consideration of Rs.5,50,000 and the sale deed was properly registered bearing No.2818 dated 15-10-2009 between the parties after the purchasing the appellant approached to the concerned department Excise and Taxation Department the vehicle duly was registered in record of the Excise and Taxation Department and the original number plate was also issued in favour of first owner.

(2)That the customs authority Gaddani also verified the number plate of the vehicle from concerned department Excise and Taxation at Quetta after verification of number plates the respondents/investigation inspector concealed the facts about original number plate therefore the proceedings of the concerned Authority Gaddani which is consist mala fide intention.

(3)That after taken the custody of vehicle above numbered but no departmental proceedings initiated and the concerned authority Gaddani used delay tactic, meanwhile the appellant wrote a letter to the Deputy Collector Gaddani, Assistant Director Gaddani, the copy of letter also sent through courier service and the appellant requested concerned authority Gaddani to stop the misuse of the vehicle but the concerned authority ignore the application of appellant.

(4)That without any proceedings or show cause notice as well as necessary proceedings was not initiated, meanwhile the appellant submitted Constitution Petition bearing No. 583/2012 against Customs Authority Gaddani for initiating proceedings as per law but when the respondents knew through notice of the C.P thereafter the respondent issued the show cause notice to the appellant with mala fide intention but the appellant properly submitted reply and legal objection of show cause notice, copy of C.P order dated 13-9-2012.

(5)That the customs authority Gaddani decided the matter on 10-10-2012 against the appellant, the appellant being aggrieved and dissatisfied and filed appeal before the Collector Customs, who also dismissed the Appeal of the appellant on 23-1-2013, during the pendency of appeal, the appellant informed the respondents Customs Authority by hand as well as through Courier and through fax on 20-12-2012 and 21-12-2012, but in spite of information the respondent custom authority sell out appellant vehicle in question through auction with mala fide intention and ulterior motives without informing the appellant which is beyond the scope of law and the value of the vehicle was assessed by the authority Rs.12,00,000 but the vehicle was sell out through auction only more than Rs.5,00,000 to his relative without providing any chance to the appellant. The appellant requested to the respondent customs authority to provide auction papers as well as value assisting documents, but the respondent refused to supply the said documents and the vehicle was sell out through auction illegally.

(6)That Excise and Taxation Department at Quetta properly and legally received excise duty from 2006 till 2012.

7.The Departmental representative submitted the parawise comments which are reproduced as under:-

(A)That all the ingredients of case-laws do not bar a competent authority from exercising his lawful duties therefore, order of confiscation was lawful.

(B)Burden of proof as enunciated vide section 187 of the Customs Act 1969, has two parts viz 1st burden to be discharged by the claimant/owner/appellant and then if required by law i.e. the seizing agency. But in the instant case the appellant failed to do so ab intio.

(C)That the version desired of sections 211 and 32 of the Customs Act, 1969 were neither invoked nor were relevant in this case, hence does not have merit.

(D)That the Adjudication Authority had passed speaking order by taking all relevant pre-cautions including verification of registration documents from MRA, Quetta, which do not support the stance of the appellant.

(E)No Comments.

8.During the course of arguments, learned counsel for the appellant submitted that the appellant is the law abiding citizen and engaged in legal profession as Advocate, the appellant purchased registered vehicle against the market value of Rs.550,000 vide Sale Deed dated 15-10-2009 from one Syed Naseer-ud-Din. The appellant also inquired about the legal status of the vehicle's registration from the MRA, Quetta, which registration was confirmed, ultimately transferred the ownership to the present appellant. He also submitted that during correspondence with the customs authorities after seizure in no stage, the MRA denied the registration of the vehicle and allotment of its registration number and by producing the Registration Book, the appellant has discharged his liability under Section 187 of the Customs Act, 1969. Lastly counsel for the appellant requested for acceptance of the appeal and release of the vehicle.

9.On the other hand, Mr. Zuber Awan, Inspector on behalf of the respondent opposed the contention of the learned counsel and submitted that the vehicle in question is non duty paid, the appellant has failed to produce the lawful import documents and mere production of the Registration Book is not sufficient to discharge his liability required under section 187 of the Customs Act, 1969. He 'supported the impugned order and requested for dismissal of the appeal.

10.I have heard both the parties and gone through the file. From perusal of the record, it transpired that the vehicle was seized by the customs staff on RCD Highway from possession of the present appellant. On the spot the appellant produced Registration Book duly transferred in his name by the MRA, Quetta. Duringinvestigation, a letter C.No.20-Cus/Seiz/MS/G/2012/147 dated 12-7-2012 was produced, which was sent for verification of the Registration documents was sent to the ETO/MRA, Quetta who furnished attested copy of Form "F" and no documents of its import was supplied as in Form "F", at serial No.13, the vehicle was shown as auctioned, therefore, letter C.No.20-Cus/ Seiz/MS/G/2012/338 dated 24-7-2012 was again sent to the ETO/MRA, Quetta regarding production of the auction documents on the basis of which the vehicle was registered. In response to the said letter, the ETO/MRA, Quetta replied that Form "F" of the vehicle in question has already been supplied to your office, however, as per report of Incharge Record Room, the original file of the vehicle is not available in the Record Room. Sufficient correspondence were made with the ETO/MRA, Quetta but he only forwarded copy of Form "F" and extract from the page of Register vide letter No.215-MV/ETO-I dated 18-7-2012. Lastly, the ETO informed the customs authorities that the file is missing and they are trying to locate the same. During the correspondence, the ETO supplied the relevant record of the vehicle (placed on file at pages 59 to 71) provided to the Customs Authorities, according to which the vehicle 1993 model and got registered in 2006. In such long period the vehicle was properly plying on road and also time and again renewed but no one apprehended the vehicle in such long period on such allegation.

11.From perusal of the above, the ETO/MRA, Quetta neither denied issuance of the Registration nor the ownership of the present appellant. According to section 187 of the Customs Act, 1969, the burden upon the possessor is to produce lawful authority to the customs authorities. For ready reference, section 187 of the Customs Act, 1969 is reproduced hereunder:-

"187. Burden of proof as to lawful authority, etc.---When any person is alleged to have committed an offence under this Act and any question arises whether he did any act or was in possession of anything with lawful authority or under a permit, licence or other document prescribed by or under any law for the time being in force, the burden of proving that he had such authority, permit, licence or other document shall lie on him."

12.The learned counsel relied on the judgment reported in 2008 PTD page 525 of the Honourable Karachi High Court, whereby their lordship held:--

"Ss.168 & 211-Seizure of vehicle on charge of being smuggled.--Registration of vehicle in record of Motor Vehicle Registration Department 14 years prior to its seizure---Registration Book of vehicle produced by applicant not found to be fake by Registration Department---Non-production of bill-of-entry or import documents of vehicle by applicant---Effect---Calling upon owner of vehicle to produce bill-of-entry or other legal import documents at this stage would be nothing---Individual importer having imported goods for private or personal use would not fall within purview of S.211 of Customs Act, 1969---Registration Book produced by applicant was sufficient proof of his ownership---Burden to prove otherwise was on Customs Authorities, which they had failed to discharge --Impugned order-in-original was set aside in circumstances."

13.The learned counsel also relied on the judgment reported in 2004 PCr.LJ 1958, Lahore, wherein it is held that:--

"Ss.168, 171 & 180---Constitution of Pakistan (1973), Art.199 --Constitutional petition---Seizure of registered vehicle on the basis of report of Registration Authority that its record was not traceable and on basis of certificate of Forensic Science Laboratory obtained in absence of petitioner that its chassis number was tampered with---Validity --Such report and certificate were not sufficient to believe that disputed vehicle had been smuggled or imported without payment of customs duty---Question of disputed vehicle being smuggled item was yet to be determined by Adjudicating Authority, after which those would be liable to confiscation---Registration of vehicle in petitioner's name had not been denied---Notice under S.171 of Customs Act, 1969 had not been issued to petitioner---Nothing on record was available to prove that petitioner had smuggled disputed vehicle---No proceedings had been initiated against petitioner claiming to be owner of disputed vehicles --Notice under S.180 of Customs Act, 1969 issued to a person, who was neither owner of vehicle nor same had been seized from his possession, would have no legal consequence or bearing on petitioner---Court on basis of such ex-parte certificate could not leave peaceful/ innocent citizen at the mercy of Customs Department---Open licence could not be given to Government functionaries to harass and cause mental agony to citizens, who would be afforded full protection by Courts in such a situation---High Court accepted Constitutional petition by declaring such action of authority to be illegal and without lawful authority."

14.From perusal of the impugned Order-in-Appeal, the Collector Customs (Appeals) in the concluding para (8) admitted that "the appellant could be termed as "innocent buyer", however, the norms of justice requires that all imported vehicles should have a legal and credible backing through authentic documents as required by law". This observation made by the learned Collector Customs (Appeals) is against the spirit of section 187 of the Customs Act, 1969 the said section demands a burden of proof as to lawful authority lies on the department. In this respect the superior courts of the country, held in its reported judgment in 2007 SCMR P-10 held that Customs authorities and such other public functionaries had no authority to detain such goods merely on suspicious. Petitioner had showed documents of registration in his name to the customs official who having detained the car, insisted the production of import documents for release of the car-detention of car was an act of high handedness, which was committed through misuse of official authority.

15.The learned counsel also relied on another reported in 2008 PTD 525 of Sindh High Court, Karachi wherein their lordship held that:--

"once the appellant produced the registration documents of a vehicle, the burden of proof shifted on the customs authorities which they have failed to discharge, the appellant has, therefore, proved himself as legal owner of the same."

16.During arguments, learned counsel also submitted that sufficient correspondence were made with the ETO/MRA by the customs department, wherein the MRA never denied the registration of the vehicle, even then the observation that the vehicle is non duty paid and smuggled one. But while observing so the Adjudicating Officer has ignored that the Registration of vehicle is sufficient proof of fact that the vehicle is legally imported in the country because as soon as the registration papers are presented before the MRA, it is their responsibility to check the documents and examine them thoroughly with reference to their genuineness before registration. It also cannot be overlooked that the vehicle in question is of 1993 model and after lapse of 19 years calling upon the party to produce the bill of entry or any other legal import documents is nothing but a practical joke with the appellant as by virtue of section 211 of the Customs Act, 1969, importer or exporter is liable to maintain importation related record and documents only for a period of 05 years and individual importer who imported the goods for private or personal use is exempted from such condition as per section 211 of the Act. Thus once the appellant produced the registration documents, the burden of proof shifted on the respondents but they have failed to discharge that.

17.In view of the above discussion, facts and circumstances and in consideration of the judgments of the superior courts, the impugned Order-in-/Appeal No.7052/2013 dated 14-2-2013 and Order-in-Original No.23/2012 dated 18-10-2012 are set aside and the appeal of the appellant is allowed as per in appeal.

JJK/2/Tax(Trib.)Appeal accepted.